NEW YORK ( TheGoldAndOilGuy.com) -- It has been a very long couple of years for the precious metal bugs. The price of gold, silver and their related mining stocks have bucked the broad market up trend and instead have been sinking to the bottom in terms of performance.
Earlier this week I posted a detailed report on the broad stock market and how it looks as though its uptrend will be coming to an end sooner tather than later. The good news is that precious metals have the exact flip side of that outlook. They appear to be bottoming as they churn at support zones.
While metals and miners remain in a down trend it is important to recognize and prepare for a reversal in the coming weeks or months. Let's take a look at the charts for a visual of where price is currently trading.
Weekly Price of Gold Futures:Gold has been under heavy selling pressure this year and it still may not be over. The technical patterns on the chart show continued weakness down to US$1,300 per once, which would cleanse the market of remaining long positions before price rockets towards $1,600+ per ounce. There is a second major support zone drawn on the chart that is a worst case scenario. But this would likely on happen if U.S. equities start another major leg higher and rally through the summer. Weekly Price of Silver Futures: Silver is a little different than gold in terms of where it stands from a technical analysis point of view. The recent 10% dip in price, which shows on the chart as a long, lower candlestick wick, took place on very light volume. To me this shows the majority of weak positions have been shaken out of silver. Gold has not done this yet and it typically happens before a bottom is put in. While I figure gold will make one more minor new low, silver I feel will drift sideways to lower during until gold works the bugs out of the chart.